FG targets more projects with N300bn Sukuk issuance

In a drive to close Nigeria’s infrastructure deficit, the federal government is seeking to expand the scope of projects financed with the issuance of N300 billion Series VII Sovereign Sukuk. This was disclosed by the Director-General of the Debt Management Office (DMO), Patience Oniha, during the Investors’ Meeting for the Federal Government of Nigeria (FGN) […]

In a drive to close Nigeria’s infrastructure deficit, the federal government is seeking to expand the scope of projects financed with the issuance of N300 billion Series VII Sovereign Sukuk.

This was disclosed by the Director-General of the Debt Management Office (DMO), Patience Oniha, during the Investors’ Meeting for the Federal Government of Nigeria (FGN) N300 Billion Series VII Sovereign Sukuk Issuance yesterday in Abuja.

Oniha noted that Nigeria has made steady progress with Sukuk financing, which has grown to N300 billion in the current tranche.

The funds, she said, would be deployed to critical road and bridge projects across the country to support the government’s economic growth and development agenda.

The DMO boss explained that Sukuk is part of the approved domestic borrowing captured in the federal government’s annual budget, hence there is no need for additional legislative approval.

However, she emphasised the need for more budgetary allocations to projects that qualify for Sukuk financing, as this remains a key limitation.

“As we can see, the demand market has grown. What we need now is to have more projects included in the budget that can be funded through Sukuk. That’s a legislative matter,” she stated.

She also hinted at the government’s long-term plan to finance revenue-generating projects through Sukuk, provided such projects can repay both the principal and rental obligations attached to the instrument.

Addressing concerns around the frequency of Sukuk issuance, the DMO chief acknowledged that the process is resource-intensive and requires approvals from multiple bodies, including the Central Bank of Nigeria (CBN) and Islamic finance experts from abroad. This, she said, makes it impractical to issue Sukuk in small, frequent tranches.

“It takes a lot of work to issue Sukuk. Where we should be going is a situation where we have a pot of N1 trillion and can spread it over several quarters. But issuing N50 billion or N100 billion is not cost-efficient,” she said.